STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1.  Otis Elevator Company (India) Limited, through its duly

    authorized signatory, Magnus Towers, 9^th Floor, Mindspace,Link Road, Malad (West), Mumbai, Maharashtra.

2.  Otis Elevator Company (India) Limited, through its authorized signatory, 504-505, Rectangle One, D-4 Saket, New Delhi-110 017.

3.  Otis Elevator Company (India) Limited, through its duly authorized signatory, SCO No. 223, ^1st Floor, Sector 37-C, Chandigarh, U.T.

                   ..…Appellants

V E R S U S

Paul Merchants Limited, SCO No. 829-830, Sector 22-A, Chandigarh, through its Company Secretary.

                                                                                 ....Respondent

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    JUSTICE SHAM SUNDER, PRESIDENT

                   MRS. NEENA SANDHU, MEMBER

                   SH.JAGROOP SINGH MAHAL, MEMBER

Argued by:  Sh.Neeraj Pal Sharma, Advocate for the appellants.

                   Sh.JPS Ahluwalia, Advocate for the respondent.

PER  JUSTICE SHAM SUNDER, PRESIDENT

1.                  This appeal is directed against the order dated 12.01.2011, rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which it accepted the complaint in the following manner:-

(i)     The OPs shall install “OTIS Electric Traction Seven Passenger Machine Room Less Elevator” forthwith, complete in all respects, being fully functional, within a period of 04 months from the date of receipt of the certified copy of this order, at the prescribed  site of the Complainant Company. The OPs shall also furnish guarantee of 12 months for the proper and efficient working of the elevator from the date of complete installation and commissioning of the lift, after its handing over by them to the Complainant Company. 

(ii)    The OPs shall pay a compensation of Rs.5,00,000/- to the Complainant Company for deficiency in service, physical harassment and financial losses suffered by it for a period of about 4 years or so.

(iii)   The OPs shall pay Rs.7,000/- as litigation costs to the Complainant.

However, on complete installation of the said elevator at the site of the Complainant Company and the same being fully functional i.e. ready for use and its formal handing over to it, the Complainant shall, after due inspection of the elevator for its proper working, pay the balance amount of Rs.1,00,000/-  i.e. 10% of the total price of the lift, to the OPs, so as to make the total payment of Rs.9.95 lacs to the OPs.

The aforesaid order be complied with by the OPs, jointly and severally, within a period of four months from the receipt of its certified copy, failing which OPs shall pay the sum of Rs.5,00,000/-, along with interest @18% per annum from the date of filing of the present complaint i.e. 21.04.2009, till the date of realization, besides complying with the order as at (i) in the foregoings and also paying the costs of litigation as Rs.7,000/- to the Complainant.

2.                The facts, in brief, proceed in the manner, that the OPs(now respondents) agreed to install One “Otis Electric Traction Seven Passenger Machine Room Less Elevators” alongwith  complete furnishing and installation of the lift as per the terms and conditions contained in the offer letter dated 31.3.2007, alongwith which other documents were attached, for a total consideration of Rs.9,95,000/-The offer was accepted which contained all the terms and conditions, governing the subject matter and were duly signed by the parties, as a result, whereof, a concluded contract came into existence. An advance of Rs. 2,98,500/- equal to 30% amount of the total contracted price, was paid to the OPs, at the time of acceptance of the proposal after deducting TDS of Rs.6,698/- (Net paid Rs.291802/-). 60% of the total price i.e. Rs.5,97,000/-, after deducting TDS of Rs.13,528/- (net paid Rs.583472/-) was paid to the OPs after receiving letter dated 11.9.2007, from them. The elevator was to be commissioned within 28 weeks, the period mentioned in the aforesaid contract. The OPs, however, failed to install the elevator, in the building of the complainant(now respondent),  within the scheduled time of 28 weeks, and lingered on the matter, on one pretext or the other. Feeling aggrieved, against the inaction of the OPs, a lot of correspondence, as well as talks, took place, between the parties, for installation and commissioning of the elevator, at the earliest, but, ultimately, the OPs vide email dated 22.11.2008, refused to install and commission the elevator, on the ground, that some material lying at the site had been stolen. It was further stated that from the storage place, the representatives of OPs, used to lift the material, under their supervision, and transport the same to the site, in sealed boxes. The representatives of the OPs, at the site, as per their own requirement, opened all the boxes, without any interference by the complainant. It was further stated that after taking over the custody of the material, the representatives of the OPs never handed over the material to the complainant. It was further stated that, in a meeting, held between the parties, the complainant made it clear that, if at all, any material had been stolen from the site, such theft could not be attributed to it (complainant) and further, that the same should have been covered under the Marine-cum-Erection Policy by the OPs, as provided, in the contract, and a claim with the Insurance Company should have been lodged by them. It was further stated that, in spite of all that, as well as exchange of correspondence, the OPs failed to complete the job of installation and commissioning the elevator at the site of the complainant. It was further stated that the OPs were, thus, deficient in rendering service. It was further stated that the complainant suffered physical harassment and mental agony, on account of the aforesaid acts of the OPs.     When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was filed.

3.                The OPs, put in appearance, and filed written statement. It was pleaded that since the services of the OPs were availed of, by the complainant, for commercial purpose, it(complaint) did not fall within the definition of a `consumer` and, as such, the complaint was not maintainable. It was stated that the complaint had been filed by M/s Paul Merchants Limited, a Company, registered under the Companies Act, and therefore, it did not fall within the definition of a `complainant` as defined in Section 2(1)(b) of the Act. It was admitted that the complainant, sought a proposal from the OPs, for installation of an elevator in their Corporate Office building. It was also admitted that a proposal dated 31.03.2007, Annexure C-2, was sent to it. It was further stated that the terms and conditions, which were annexed with the proposal, were duly signed by the representative of the complainant, as well as, by the representative of the OPs and, thus, the proposal was accepted, as a result whereof, a concluded contract came into being.  It was also admitted that 90% payment, as stated by the complainant, in the complaint, was made by it. It was also admitted that the installation and commissioning of the elevator was to be completed within 28 weeks, from the date of receipt of the order, as per Clause 26(a) of the contract. The completion was subject to handing over by the complainant, to the OPs, for their uninterrupted usage, a clear dry elevator hoistway structure, complete in all respects, layout drawing alongwith preparatory work and power supply 12 weeks before the completion date indicated in the Clause 26 (b). It was further stated that as per Clause 26(c), the OPs were at liberty to extend the completion period in case there was some delay. It was further stated that there was a basic requirement of provision of 50 square meters weatherproof lockup storage accommodation, at the site, so that the material could be squarely secured, but the same could not be met by the complainant. It was further stated that, under these circumstances, the material of the elevator, was stored in a go-down in a house at Sector 21, U.T., Chandigarh, away from the site. It was further stated that the said store was not pilferage proof, which caused unnecessary delay and harassment to their employees and led to delay, in the completion of work. It was further stated that between 29.10.2008 and 22.11.2008, it was found that some material, which was lying at the site, had been missing. A joint inspection was duly carried out. The complainant was informed that since, it had failed to provide the required lockable storage area, at the site, to secure the material, it(material) had been found missing. The complainant was also intimated that it was required to re-order, from the OPs, the material, which was found missing, from the site and shortly, an X-order was being sent to it. It was further stated that after due verification of the material, which was found missing, at the site, the OPs raised an X-order dated 27.11.2008, for the value or Rs.2,27,000/-, as it was completely under the direct control of the complainant. It was further stated that the complainant was not ready to pay for the missing material.  It was further stated that on account of the aforesaid reason, the elevator could not be installed and commissioned, as per the date and time stipulated in the contract. It was further stated that there was no deficiency in rendering service, on the part of the OPs. It was further stated that the complainant being a Company and, as such, a juristic person, the District Forum, was wrong in awarding compensation for physical harassment and mental agony. It was further stated that no financial loss was proved by the complainant. The remaining allegations were denied being wrong.

4.                The parties led evidence, in support of their case. 

5.                After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum accepted the complaint, in the manner, referred to, in the opening para of this order.

6.                Feeling aggrieved, against the order of the District Forum, the instant appeal, was filed, by the appellants/OPs.

7.                We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case carefully.

8.                The Counsel for the appellants, submitted that since the services of the OPs, were availed of, by the complainant, a Company incorporated under the Companies Act, for commercial purpose, the sole motive whereof was to generate profit, it(complainant) did not fall within the definition of a `consumer` and, as such, the complaint was not maintainable.  He further submitted that, admittedly, the contract was entered into between the parties for installation and commissioning of the elevator, referred to above, and payment of 90% of the price for the elevator, on two occasions, was made by the complainant, to the OPs. He further submitted that the work was not completed, as the hoistway, had not been provided by the complainant. He further submitted that even a secured lockup store room of 50 square meters, was not provided by the complainant, as per the terms and conditions of the contract, as a result whereof, the material had to be stored in a godown, at some distance from the site. He further submitted that some material from the site was found missing, the value of which was Rs.2,27,000/-. He further submitted that the complainant was asked to re-order the material from the OPs, which was found missing, but it (complainant) failed to do so. He further submitted that on account of the aforesaid reasons, the work could not be completed. He further submitted that the District Forum, was wrong in holding that the complainant fell within the definition of a `consumer`. He further submitted that even the District Forum, was wrong in awarding compensation, for physical harassment and mental agony to the complainant, as it (complainant)  being a juristic person, was not entitled to the same.  He further submitted the order of the District Forum, being illegal, and perverse, is liable to be set aside.

9.                On the other hand, the Counsel for the respondent submitted that, no doubt M/s Paul Merchant Limited (complainant), is duly incorporated Company under the Companies Act, yet the elevator was ordered to be installed and commissioned by it, from the OPs, for the use of its staff and not for generating the profits. He further submitted that the District Forum, was right in coming to the conclusion that, since, the material was, under the control and in custody of the OPs, having been kept in a store, which was duly locked by them and the complainant never came into possession of the same, loss thereof could not be attributed to it (complainant.) He further submitted that even the ‘marine -cum- erection’ insurance policy, as per the terms and conditions of the contract, was not obtained by the OPs, on the basis, whereof, they could claim compensation for the loss of material from the site. He further submitted that the complainant complied with all the terms and conditions of the agreement. He further submitted that the delay was attributable to the OPs. He further submitted that even the OPs left the work, in question, midway, after receipt of 90% amount settled between the parties, for installation and commissioning of the elevator. He further submitted that the OPs were clearly deficient in rendering service and, as such, the District Forum was right in accepting the complaint. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.

10.             The core question, that falls for consideration, is, as to whether, the complainant/respondent falls within the definition of the consumer or not. For proper decision of this question, the provisions of Section 2(1)(d) and Section 2(1)(o), defining the `consumer` and ‘service’ respectively, are extracted as under:-

        “(d) "Consumer" means any person who, -

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised or under any system of deferred payment when such use is made with the approval of such person but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii)[hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other then the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose]; Added by Act 62 of 2002 w.e.f. 15.03.2003.

[Explanation. For the purposes of this sub-clause "commercial purpose" does not include use by a consumer of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood, by means of self-employment;]

Section 2(1)(o) defines service as under:-

(o) "services" means service of any description which is made available to potential 16[users and includes, but not limited to, the provision of] facilities in connection with banking, Financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, 17[housing construction] entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.”

12.           According to Section 2(1)(d)(i) of the Act, the consumer does not include a person who obtains such goods for resale or for any commercial purpose. Section 2(1)(d)(ii), which was amended by Act 62 of 2002 w.e.f. 15.03.2003, clearly lays down that the person who hires or avails of the services for a consideration, for any commercial purpose shall not qualify, as a consumer. In the instant case the complainant/respondent is a Limited Company. The complainant/respondent has engaged itself, in the business activity. The elevator, in question, was to be got installed and commissioned by the complainant/respondent, from the appellants/OPs, for the purpose of advancing its business, to improve the efficiency of employees and to provide facility to the customers, dealing with it(complainant). The status of the complainant, being that of a commercial entity, and it had availed of the services of the OPs/appellants, for installation and commissioning of the elevator for furthering and advancing its business, with an intent to generate profits, and, as such, it did not fall, within the definition of a consumer. In the complaint, it was nowhere stated by the complainant that, the elevator was to be got installed, from the OPs, for it, not for the use of its customers and furthering its(complainant) business, but only for personal use of its Directors or its employees. No doubt, at the time of arguments, the Counsel for the respondent, submitted that the services of the OPs/respondents, were availed of, by the complainant, just for the use of its employees, and, not with a view to generate profit, by furthering and advancing its business. However, such a submission, made by the Counsel for the complainant/respondent, being beyond pleadings and, under these circumstances, the same cannot be taken into consideration.  Similar principle of law was laid down in Sanjay D.Ghodawat Vs. R.R.B.Energy Ltd. IV (2010) CPJ 178 (NC), a case decided by a full Bench of the Hon`ble National Commission. In Economic Transport Organization Vs.Charan Spinning Mills (P) Ltd., & Anr., I (2010) CPJ 4 (SC), a four Judge Bench, of the Hon’ble Apex Court, also held that, after the amendment of Section 2(d) of the Act w.e.f.15.03.2003, the services of the carriers if had been availed of for any commercial purpose, then the person availing of the services will not be a consumer.  Since, the services of the OPs/appellants, in the instant case, were availed of, by the complainant/respondent, for commercial purpose, it did not fall within the ambit of a consumer, and, as such, the complaint was not maintainable.

13.           No doubt, the District Forum, relied upon Karnataka Power Transmission Corpn. & Anr. Versus Ashok Iron Works Pvt. Ltd., reported as III (2009) CPJ 5 (SC), to hold that the complainant/respondent, fell within the definition of a consumer. The facts of Karnataka Power Transmission Corpn. & Anr. Versus Ashok Iron Works Pvt. Ltd`s case (supra) are clearly distinguishable, from the facts of the instant case.  That case related to the definition of consumer, before the aforesaid amendment was carried out in 2003. It was only w.e.f. 15.03.2003, that in Section 2(1)(d)(ii) the words “does not include a person who avails of such services for any commercial purpose”, were inserted, but  earlier to that, these words were not in existence. The decision in Karnataka Power Transmission Corpn. & Anr. Versus Ashok Iron Works Pvt. Ltd`s case (supra) relates to the pre-amendment definition of consumer and, as such, no help, could be drawn therefrom, by the complainant/respondent. The District Forum was, thus, wrong in relying on the decision rendered by Karnataka Power Transmission Corpn. & Anr. Versus Ashok Iron Works Pvt. Ltd`s case (supra) to hold that the complainant/respondent, fell within the definition of a consumer. The finding of the District Forum, in this regard, being perverse, are reversed.

14.             The next question, that arises for consideration is, as to whether, the directions of the District Forum to the effect that the OPs/appellants, shall pay compensation of Rs.5,00,000/-, to the complainant/respondent Company, for physical/mental harassment and financial loss was correct or not. It may be stated here, that the complainant is a Limited Company, and, as such, a Corporate entity was not entitled to compensation for physical harassment/mental agony/harassment. Similar principle of law was laid down in Wipro Limited Vs.Toppers Multimedia (P) Limited & Ors. , II (2010) CPJ 39 (NC). Not only this, even no evidence was produced, by the complainant, that it suffered financial loss, due to non-installation of the elevator. The District Forum, was, thus, wrong in awarding compensation for physical harassment, mental agony/harassment and alleged financial loss, to the complainant.

15.             There is, no dispute, about the factum that the services of the OPs/appellants were engaged by the complainant/respondent, for the purpose of installation and commissioning of the elevator. C-2 is the proposal, which was sent by the OPs/appellant, to the complainant/respondent, alongwith which, the specifications were also attached. This proposal was duly accepted by the complainant/respondent and, thus, a concluded contract came into existence. Even 90% payment of the amount settled between the parties, for the work, in question, was paid by the complainant, to the OPs. The first grouse of the OPs/appellants was that hoistway structure was not completed in time, by the complainant/respondent, as a result whereof, the elevator could not be installed and commissioned, within the stipulated period. It is evident from Annexure R-1, sent by the representative of the OPs/appellants, to the complainant/respondent, that hoistwasy structure was ready and only some pending works were to be completed, to start installation of elevator. The contention of the Counsel for the Ops, that hoistway was not constructed, in time, therefore is, belied by Annexure R-1, their own document. No doubt, one of the conditions in the contract C-2, was that the complainant/respondent, was to provide suitable weather proof lockable storage accommodation of approximately 50 square meters, per elevator, with electric lights for elevator materials, at the ground floor level, near the hoistway. Such a storage room was not available, at the site. However, the OPs/appellants, stored the material for the purpose of installation and commissioning of elevator, in a store, at some distance, from the site in question, which was under the lock and key, as also, in control of the OPs. At the time of storing the material in the store, no protest was raised by the OPs. At no point of time, the material, in question, was handed over to the complainant. According to Clause 19 of the contract, the equipment and material, involved in the execution of the works contract, was to be covered against risk during transit, storage and erection, at the site by a `marine-cum-erection` Insurance Policy and the liability of the Ops shall be restricted to the terms and conditions, specified in the Insurance Policy. According to the OPs, some material worth Rs.2,27,000/- which was required for installation of the elevator, was stolen from the site and when the complainant/respondent, was asked to  re-order the same, it refused to do so. No document was produced by the OPs, to the effect that, such policy was taken by them, against risk, during transit and storage of the material, required for installation of the elevator and commissioning of the same. It means, that the OPs did not obtain any policy. Had they obtained the Policy aforesaid, as provided in Clause 19 of the contract, they would have certainly claimed compensation from the Insurance Company, for the loss of material at the site. Under these circumstances, for the fault of the OPs/appellants, the complainant/respondent, could not be made liable. Vide Annexure C-5, from a representative of the OPs, intimated the complainant/respondent, that the installation of brackets had been completed and M/s Ramesh Steels had to fix the vertical supporting channels. Vide this document, the complainant/respondent, was also asked to get the channels fixed `asap`, so that installation could be started. According to the contract C-2, it was not the responsibility of the complainant, to get the channels fixed from any agency. It was the duty of the OPs, to get the same done. C-6 is the letter, which was sent by the complainant/respondent, in reply to C-5, wherein it was clarified by them, that it was for the OPs, to contact M/s Ramesh Steels, to fix the vertical supporting channels. The OPs, thus, wanted to pass on their responsibility and liability, on to the complainant. Under these circumstances, the OPs were certainly responsible for not installing and commissioning the elevator, in time, and even they left the work midway. They had already received 90% of the payment. They were definitely deficient, in rendering service. Under these circumstances, the complainant/respondent would have been entitled to the relief directing the Ops to install “OTIS Electric Traction Seven Passenger Machine Room Less Elevators” forthwith, complete in all respects, being fully functional, within a period of 04 months and  also furnish guarantee of 12 months for the proper and efficient working of the elevator, from the date of complete installation and commissioning of the elevator, after its handing over by them, to the Complainant Company, and it(complainant) would have been liable to pay the balance amount of Rs.1,00,000/- the remaining   price (i.e.10% of the total price of the elevator), after its complete satisfaction regarding the installation of the same and it would have also been entitled to costs awarded by the District Forum, had it (complainant)been proved to be a consumer. Since, in the instant case, the complainant/respondent has not been proved to be a consumer, it is not entitled to the aforesaid relief granted by the District Forum.

16.             The order of the District Forum is not based on the correct appreciation of evidence and law, on the point. The order passed by the District Forum, being illegal, and perverse, is liable to be set aside.

17.             For the reasons recorded above, the appeal, is accepted, with no orders as to costs. The impugned order is set aside. The appellant/complainant shall, however, be at liberty to resort to any other remedy, which may be available to it under Law.

18.             Certified Copies of this order be sent to the parties, free of charge. The file be consigned to record room.

Pronounced.

26.07.2011

                                                                                    Sd/-

[JUSTICE SHAM SUNDER]

PRESIDENT

      Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Rg